Proving direct return on investment is a challenge for many marketing leaders. In healthcare, this is especially true. Consider the patient journey and its rapid and continuing evolution towards consumerization. Over the past three years, the number of healthcare consumers searching for cost information online almost doubled from 14% to 27%.
While most research by patients takes place online, just 2.4% of healthcare appointments are scheduled in digital channels. Reluctant to share their personal health information in an online form, patients prefer to handle the last leg of the scheduling journey on the phone. In fact, 88% of healthcare appointments are scheduled this way. This cross-channel patient journey presents marketing attribution challenges that can quickly derail ROI calculations.
Inside the walls of the healthcare organization, patient privacy concerns and compliance are top-of-mind across functional areas. As a result, goals of the finance and technology teams can be at odds with those of marketing adding yet another challenge to overcome in calculating ROI.
This brings us to C-level executives and physician leadership. As conversations around the patient experience grow, these stakeholders are demanding a true ROI on service line marketing dollars. They want to understand the value marketing leaders are creating for patients and the organization – not what hurdles stand in the way.
So, what’s a marketing leader in healthcare to do?
narrowing in on metrics that matter
In the recent past, healthcare marketing was focused almost exclusively on the patient experience – the touch points patients, prospects, and family members have as they engage with the hospital or health system. With a focus on experience, marketing teams reported on impressions, engagement, and, in the most basic sense, conversions.
While conversions, cost per conversions, and click through rate can all be early indicators of success, do they truly connect to the success your organization is striving to achieve? Do your CEO or service line chairs care about these vanity metrics, let alone understand which conversions are tracked in your analytics platform? Plus, absent of quality, these metrics can provide a misleading view of marketing impact.
While marketing’s focus should never pull away from providing a great patient experience, the truth is you have no choice but to connect the customer experience with metrics that matter to leadership. Cost per acquisition (CPA) targets are a great place to start.
setting (and leveraging) cost per acquisition targets
Setting your CPA target requires conversations that extend beyond the marketing team. To prepare for those conversations, consider stealing a concept from B2B marketing – cost per lead. Outside healthcare, cost per lead (CPL) is a benchmark metric that illustrates marketing’s influence on key acquisition actions. In a way, lead is synonymous with prospective patient, so in healthcare we can apply the calculation to demonstrate the effectiveness of marketing’s influence on actions that directly result in scheduled appointments like Schedule Online form completions and phone calls. How do you calculate cost per lead?
Imagine you’ve invested $50,000 in patient acquisition marketing activities and, as a result, 500 individuals filled out your Schedule Online form or called to schedule an appointment. In this example, your cost per lead is $100. The trouble with cost per lead is that it doesn’t speak to quality. How many of those who reached out via form or phone did not ultimately schedule an appointment?
Therefore, marketing leaders focused on business results should understand cost per acquisition. If you know your CPL, the simplest path to CPA is dividing your CPL by the percent of leads that turn into patients. For example, if it currently costs $100 to capture a lead and 25% of those leads turn into patients, then your cost per acquisition is $400.
With this metric in hand, have a conversation with your leadership team. How much is the organization willing to invest in acquiring a net-new patient? How does that number compare to today’s reality? Does that number change if you consider patient retention and lifetime value? And how does this target vary by service line?
These are the kinds of questions (and answers) that allow marketing leaders to gain the trust of executives and drive organizations forward. To take advantage of that opportunity and position marketing as a growth driver, connect CPA to the customer experience in a way that demonstrates the levers you can pull to reduce CPA.
If the bottleneck exists at the conversion point from prospect to patient, consider campaigns to nurture those individuals over time or address the relevance of your targeting criteria. If the conversion rate from prospect to patient is solid but volume is lacking, consider awareness and acquisition campaigns to boost lead flow or take a strategic approach to conversion rate optimization along your patient journey.
We have a comprehensive perspective on approaches marketing leaders can take to drive business results and earn the trust of their C-suite. If this is a topic you’re interested in, I highly recommend you read an article from our CEO, Steve Kessen: Lead like a marketer, think like a CEO.
And if you have questions about determining a CPA target that makes sense for your business or the levers you can pull as a marketing leader to increase ROI, please don’t hesitate to reach out.